Chapter 5: stakeholders in a business
Stakeholders – individuals or groups that have a direct interest in the activities of a business.
Stakeholders can influence what a business does, and as they will be affected by the business,
they will try to get the business to do what they want.
Stakeholder Theory/Concept – the view that businesses and their managers have
responsibilities to a wide range of groups, not just shareholders
Stakeholder Group Objectives
Customers Good prices, good quality goods, good company image
Employees Good working conditions, good pay, job security, good corporate image
Local Community Good employer, non-polluting, social responsibility
Management Power, prospects, pay and perks, good corporate image
Shareholders Good return on investment, healthy share price and dividend rate,
good corporate image, max short-term profits, long-term growth
Government Pays taxes, meets legislative requirements, provides employment
Suppliers Good prices, stable demand, good corporate image, prompt payers,
longterm growth (as to increase orders to suppliers)
Banks/Lenders Paid back in full when repayments due, receive interest on loans
Competitors Compete by lawful means, differentiate its products from other
businesses, compare and contrast performance with other businesses
Corporate Social Responsibility – the concept that accepts that businesses should consider the
interests of society in its activities and decisions, beyond the legal obligations that they have
Reasons for CSR Reasons against CSR
Marketing and promotional advantage – Cost involved in ensuring a socially
good reputation responsible approach
Reduces the changes of breaking laws, Reduction in Profits
avoiding bad publicity and heavy court fines Distraction from main business activity
Long term financial gain – through increase In developing countries, it is argued that
in demand etc. economic growth is more important than
CSR
Improvement in the number and quality of Businesses just using it for publicity not
employee applications actually doing it for society
Stakeholders – individuals or groups that have a direct interest in the activities of a business.
Stakeholders can influence what a business does, and as they will be affected by the business,
they will try to get the business to do what they want.
Stakeholder Theory/Concept – the view that businesses and their managers have
responsibilities to a wide range of groups, not just shareholders
Stakeholder Group Objectives
Customers Good prices, good quality goods, good company image
Employees Good working conditions, good pay, job security, good corporate image
Local Community Good employer, non-polluting, social responsibility
Management Power, prospects, pay and perks, good corporate image
Shareholders Good return on investment, healthy share price and dividend rate,
good corporate image, max short-term profits, long-term growth
Government Pays taxes, meets legislative requirements, provides employment
Suppliers Good prices, stable demand, good corporate image, prompt payers,
longterm growth (as to increase orders to suppliers)
Banks/Lenders Paid back in full when repayments due, receive interest on loans
Competitors Compete by lawful means, differentiate its products from other
businesses, compare and contrast performance with other businesses
Corporate Social Responsibility – the concept that accepts that businesses should consider the
interests of society in its activities and decisions, beyond the legal obligations that they have
Reasons for CSR Reasons against CSR
Marketing and promotional advantage – Cost involved in ensuring a socially
good reputation responsible approach
Reduces the changes of breaking laws, Reduction in Profits
avoiding bad publicity and heavy court fines Distraction from main business activity
Long term financial gain – through increase In developing countries, it is argued that
in demand etc. economic growth is more important than
CSR
Improvement in the number and quality of Businesses just using it for publicity not
employee applications actually doing it for society
